Overproduction of Goods

The federal government responded to the high production of cars by employing people to build more roads and by 1929 10,000 miles of highway were being built per year.

How did the federal government respond to the high production of goods?

By 1929 about 160 million electrical goods were being sold each year. It eventually became clear manufacturers were making too much.

How many electrical goods were being sold by 1929?

Technical advancements meant electrical goods and cars could be put into mass production.

What could be put into mass production?

If the government had decided to tax the rich more and redistribute the wealth then its possible businesses and employment and could have been given a help in hand.

What could have been given a help in hand?

Henry Ford produced the Model T car with the aim that any family earning a reasonable income could have one.

What did Henry Ford produce?

By encouraging the expansion of business and unregulated credit the government policy did not take into consideration most businesses cannot grow exponentially without consequences- there comes a point where people cannot afford to borrow more money or buy every new product offered.

What did the government policy not take into consideration?

The motor industry simulated the other industries like steel, rubber and petrol.

What did the motor industry simulate?

As production rose, prices fell and Model T's went from $850 in 1914 to $295 in 1918.

What happened as production rose?

In the motor industry competition from General Motors and Chryser meant there was more of a choice and availability of cars than there was people to buy them.

What happened in the motor industry?

When the depression hit properly the amount of money in circulation fell dramatically which exacerbated the problem .

What happened when the depression hit properly?

Once everyone had the latest product there was no demand for it so market consumption slowed down.

What slowed down?

Demand was high and Ford was able to employ thousands of people and pay them well.

What was high?

Household items like radios, washing machines, and fridges were popular with a new industry advertising, encouraging people to believe they needed the latest models.

What was popular in the new industry?

There was also a lack of acknowledgement that when production of goods had to be halted there was a lack of alternatives in the job market so people began to lose their jobs.

What was there a lack of?

New electrical goods were also being sold in their millions.

What were being sold in their millions?

To increase taxes would have been anathema to the policies of deregulation at the time.

What would happen if taxes increased?

Boom years in the 1920s saw an overproduction of goods.

When did the boom years occur?

Not everyone could afford to operate their cars or fridge as frequently as manufacturers wanted them too.

Who couldn't afford to operate their cars or fridges as frequently?